Nepotism Concern Roils NBA Union as Players Question Hire

Billy Hunter, left, executive director of the National Basketball Players Association and Derek Fisher, president of the NBA Players Association, speak at a press conference in New York on Nov. 10, 2011. Photographer: Patrick McDermott/Getty Images

April 25 (Bloomberg) -- The National Basketball Players
Association, whose business practices are being questioned by
President Derek Fisher, paid almost $4.8 million to Executive
Director Billy Hunter’s family members and their professional
firms since 2001, according to public records.

Fisher was asked to resign last week by the union’s
leadership after he sought an outside review of finances. The
request for him to step down came after the association’s
executive committee spoke with Hunter on a conference call.

Hunter, a former U.S. attorney who led the players through
two work stoppages, has a daughter and daughter-in-law on staff
at the union. Another daughter is special counsel at a law firm
used by the association, and Hunter’s son is a principal at a
financial planning and investment firm that last fiscal year was
paid $45,526 a month to run the union’s financial awareness
program and advise on investments, according to filings with the
U.S. Labor Department.

“It’s not a criminal act, but it’s not something I would
do,” said Marvin Miller, who led baseball players through three
strikes and two lockouts as their salaries rose 12-fold between
1966 and 1982.

Union spokesman Dan Wasserman said the executive committee
knows about the Hunter family’s positions with the organization.
He said Hunter was unavailable to comment.

“There’s been full disclosure,” Wasserman said in a
telephone interview.

Hunter said in an interview two days ago with the New York
Times that his family members are highly credentialed and “in
many instances, they’re being paid at or below the market.”

“My kids have been vetted; the players have seen them,”
Hunter told the newspaper. “They’re probably more competent
than most of the people on my staff.”

‘Ethical Concern’

While Hunter isn’t breaking any law or violating
association rules, having so many relatives making money from
the union is enough for an independent examination, said Robert
Barbato, a business ethics professor at the Rochester Institute
of Technology.

“The involvement of so many family members who are
receiving significant economic benefits raises enough of an
ethical concern that an independent review seems required,”
Barbato said in an e-mail. “Unless there is a reasonable
explanation for calling for his resignation, I’m especially
concerned that the executive committee has tried to silence
Derek Fisher.”

Union Conference Call

Hunter, 69, discussed his family’s role in the union and
the organization’s finances during the conference call last week
with its executive committee, said the Washington Wizards’
Maurice Evans, a member of the nine-player group. After it
concluded, the committee asked for Fisher’s resignation, saying
he failed to uphold his duties as president. Fisher didn’t
participate in the call.

Fisher, who signed with the Oklahoma City Thunder last
month, in an April 20 statement said he was “extremely
disappointed” with the executive committee.

“I have tried to convey the legal and moral obligations we
have as union officers,” said Fisher, 37. “Sadly, the
executive committee has now waged a personal character attack on
me to divert attention from the real issue.”

According to the union’s constitution, the executive
director of the 450-member organization has the authority to
hire and establish salaries for administrative and legal staffs,
outside counsel and other advisers.

Hunter took over as executive director in 1996. A former
National Football League player, he was the U.S. Attorney for
the Northern District of California from 1977-84.

Partner at Prim

His son, Todd, is one of three partners at Prim Capital
Corp., a Cleveland-based firm that runs the union’s financial
awareness program and advises the organization on its
investments. The union had about $210 million in assets as of
July 2011, according to its annual filing with the U.S.
Department of Labor.

The association has paid Prim almost $3 million since 2005,
according to filings.

Prim has been working for the union since at least 1999,
and Todd Hunter joined in 2002, Prim spokeswoman Carolyn Kaufman
said in a telephone interview. Todd Hunter didn’t work on union
matters until 2008, she said. Prim’s contract with the union
bars the company from taking players as money management
clients, she said.

Wasserman said the work was put out for bid and Prim was
selected over at least three other companies.

Hunter’s Daughter

Billy Hunter’s daughter Alexis has worked for two law firms
that were hired by the union since he took over. According to
her LinkedIn profile, she left the U.S. Attorney’s office in San
Francisco in 2007 and joined Washington-based Howrey LLP in
September 2007. The union made its first payment to Howrey, of
$60,035, on Sept. 21, 2007, and $380,917 in total before she
left the firm for Steptoe & Johnson LLP in April 2011, according
to the filings.

The next month, the union hired her new firm to file an
unfair labor practice charge against the NBA with the National
Labor Relations Board. In October, she was listed as an attorney
of record for the union in a reply to a lawsuit brought against
the players by the NBA. Records of how much Washington-based
Steptoe & Johnson billed the union during the lockout, when team
owners shut down the league, will be on the 2012 filing, which
hasn’t been submitted.

Wasserman said the union hired Howrey because its former
general counsel Gary Hall, who died a year ago, had a
relationship with an attorney there. The union switched to
Steptoe & Johnson when he moved there. Howrey filed for chapter
11 bankruptcy protection and dissolved last year.

Billy Hunter’s daughter Robyn, the union’s benefits
director, was on the organization’s payroll with an annual
salary of $82,954, according to the 2011 Labor Department
filing. She has been paid $201,234 since joining the union near
the start of 2009.

Daughter-In-Law

Todd Hunter’s wife, Megan Inaba, currently the union’s
director of special events, has been on the payroll since 2001 -
- before she and Todd Hunter were married -- and has made almost
$1.2 million. She was paid $70,948 as the union’s director of
career programs in 2002. According to the 2011 filing, she was
paid $173,219, fifth most at the union, and more than the
$163,458 paid to Pamela Wheeler, director of operations for the
women’s players union.

In total, Hunter’s relatives and their firms, excluding the
executive director, have been paid $4,768,685 since 2001, the
filings show.

“That about says it all,” Philadelphia 76ers center
Spencer Hawes, the team’s alternate representative to the union,
said in an interview. “I don’t see what it hurts to try and see
how the money is spent.”

Hunter’s Salary

Hunter himself made $2.39 million in salary, according to
the 2011 filing, the most of the three major-sports unions based
in the U.S. NFL union chief DeMaurice Smith made $1.38 million,
according to the 2011 filing. Baseball’s Michael Weiner made $1
million.

Former NBA player and executive board member Jerome
Williams said the structure of the basketball union merits
examination.

“It’s a fine line because of how many players are
represented and the amount of money that’s influenced by one
person,” Williams, 38, said via telephone. “As a former vice
president, I would have to advise the group that it would be
wise to diversify.”

Last week, the executive committee first agreed with
Fisher’s call for an outside examination of the union. The
players changed their minds after hearing from Hunter in the
conference call.

In calling for his resignation in an April 20 statement,
the committee accused Fisher of conduct detrimental to the union
and not acting in the players’ best interest.

Annual Audits

The union in that statement said it performs annual audits
and shares the results with the executive committee and player
representatives. The association completed an audit in February
and will share the results at its summer meeting. In addition,
the statement said the union would conduct a business review
“in a timely manner.” It wasn’t specific.

The executive committee is composed of Fisher, the Boston
Celtics’ Keyon Dooling; the Miami Heat’s James Jones; the San
Antonio Spurs’ Matt Bonner; the Washington Wizards’ Roger Mason
and Evans; the Los Angeles Clippers’ Chris Paul; the Los Angeles
Lakers’ Theo Ratliff; and Etan Thomas, who isn’t on a roster.

Basketball Hall of Fame member Bob Cousy, one of the
founders of the players association in 1954, said Fisher might
have trouble gaining support from his peers.

“I doubt whether they’re seriously interested in the whole
thing unless it affects them directly,” the 83-year-old Cousy
said in a telephone interview. “At that age, all these man-children are busy doing their own thing.”

Declined Invitation

Evans told reporters on April 20 that Fisher declined an
invitation from the executive committee to defend himself on a
conference call with Hunter. Nepotism at the union was among the
topics discussed on the call, Evans said.

“Billy answered those questions to our satisfaction, was
very open and candid with us, and we were satisfied, and again,
the players were disappointed because Derek has yet to address
us,” he said.

Miller, 95, said in a telephone interview that hiring
family makes him squeamish.